Washington Wire: September 2019

The drug pricing debate in Washington resumed when Congress returned from its summer recess – though many observers question whether Congress will be able to pass legislation this year, due to policy disagreements between the majority and minority parties; the short period of time available before the 2020 elections; and the spillover effects of the impeachment inquiry.
Speaker Pelosi unveiled H.R. 3, her long-awaited drug pricing bill, on September 19. H.R. 3 would (among other things) provide the U.S. Secretary of Health and Human Services with broad authority to negotiate prices on 250 of the costliest brand name prescription drugs. Negotiated drug prices would be linked to prices paid for those medicines in 6 other countries: Australia, Canada, France, Germany, Japan, and the United Kingdom. The bill would require drug manufacturers that raise the price of their drugs faster than the rate of inflation to either lower their prices, or rebate the excess amount back to the U.S. Treasury. H.R. 3 would also restructure the Medicare Part D program to place a cap on seniors’ yearly out-of-pocket spending for covered drugs.
Some provisions of H.R. 3 mirror Administration proposals and/or portions of the drug pricing bill that was approved earlier this summer by the Senate Finance Committee (S. 2543). Other provisions of H.R. 3 go further and provoke more controversy – including, in particular, the price negotiation authority for HHS. Still, many members of Congress have said that they want to deliver on drug pricing promises. The House Energy and Commerce Health Subcommittee held a hearing on H.R. 3 on September 25, and the House Ways & Means Committee plans to hold its own hearing on the bill next month. On the Senate side, Senators Grassley and Wyden continue their efforts to build support for S. 2543, though they admit there’s a “good chance” that the legislation will not move forward before early 2020.
Quick Hits:

• The average yearly cost of employer-sponsored family health insurance exceeded $20,000 in 2019, according to a study by the Kaiser Family Foundation. Of this amount, KFF found the employee typically pays about $6,000, with the employer paying the remaining $14,000/year. Employee deductibles, too, have risen sharply in recent years, leaving families subject to heavy financial burdens. About 153 million Americans have employer-sponsored health insurance.
• Everyone in Washington says they want to protect patients from surprise medical bills, but Congress is still divided over who should bear the costs when patients see an out-of-network provider: insurers or health care providers? Lobbying on this issue intensified during Congress’s August recess, and competing ad campaigns ran throughout the country. Patient advocates are concerned that the stepped-up lobbying push, combined with the short legislative window, complicate the chances of Congress passing a surprise billing fix.
• While federal legislation is needed to solve the problem of surprise billing for the 153 million Americans with employer-sponsored health insurance, states can address the issue with respect to consumers who are enrolled in state-regulated health plans. In 2019, six states passed surprise billing protections (CO, MO, NV, NM, TX, and WA); still other states are deciding whether and how to weigh in. A total of 27 states now have some degree of consumer protections in place against surprise billing.
• HFA previously reported on plans announced by Tennessee’s legislature and Governor to radically restructure TennCare, the state’s Medicaid program. On September 17, Tennessee published the details of that proposal. Tennessee is asking the federal government to provide up-front, lump sum funding for the state Medicaid program, rather than the open-ended matching arrangement that the Medicaid statute specifies. In exchange, Tennessee asks the federal government to grant Tennessee additional “flexibility” to manage its Medicaid program, including the ability to limit or exclude coverage for certain high cost drugs. HFA and other patient groups oppose the Tennessee waiver request, and will be filing comments against the proposal. Advocates are concerned that the “flexibilities” sought by Tennessee would allow the state to reduce benefits and protections for people with bleeding disorders and other serious and expensive health needs.
• The U.S. House and Senate both passed a temporary government funding measure (“continuing resolution”) to keep the federal government funded through November 21. Passage of the continuing resolution allows House and Senate negotiators additional time to hammer out final spending bills for the fiscal year. Among other things, the continuing resolution includes emergency funding for Medicaid in Puerto Rico and other U.S. territories and money for substance abuse treatment programs. President Trump is expected to sign the bill.
• The Institute for Clinical and Economic Review is a non-governmental entity that analyzes the effectiveness and value of drugs and other medical services. This past August, ICER published a draft framework that it proposes to use for assessing the value of “single or short-term transformative therapies” (a category that would include gene therapies for hemophilia). On September 6, HFA and NHF submitted joint comments to ICER on the proposed framework, stressing that the patient voice must be incorporated at every stage of drug development, approval, and value assessment.